The planned sale of the DotOrg (.ORG) domain registry from a charitable nonprofit to a private equity firm was rejected on April 30, 2020 by the Internet Corporation for Assigned Names and Numbers (ICANN). This marks a huge victory for the nonprofit sector and millions of nonprofits and nongovernmental organizations that depend on having an affordable and stable .ORG web address. Thanks go to several key nonprofits that emphatically advocated against the sale, including the Electronic Frontier Foundation (EFF), the Nonprofit Technology Enterprise Network (NTEN), and the National Council of Nonprofits (NCN), and to the California Office of the Attorney General (AG).
In a stunning victory for nonprofits and NGOs around the world working in the public interest, ICANN today roundly rejected Ethos Capital’s plan to transform the .ORG domain registry into a heavily indebted for-profit entity. This is an important victory that recognizes the registry’s long legacy as a mission-based, non-for-profit entity protecting the interests of thousands of organizations and the people they serve.Victory! ICANN Rejects .ORG Sale to Private Equity Firm Ethos Capital (EFF)
The story behind the proposed sale is complex, but the principal parties to the proposed deal are:
Public Interest Registry (PIR): PIR “is a not-for–profit organisation created by the Internet Society (ISOC), originally to manage the .ORG domain. Not only do we operate and manage the .ORG domain, but we are also very active participants with the Internet Corporation for Assigned Names and Numbers (ICANN), and within the global domain community.”
Internet Society (ISOC): ISOC “supports and promotes the development of the Internet as a global technical infrastructure, a resource to enrich people’s lives, and a force for good in society.” ISOC’s mission, as reflected in its most recent Form 990 on Guidestar: “to promote the open development, evolution, and use of the Internet for the benefit of all people throughout the world.”
ICANN: ICANN “is a not-for-profit partnership of people from all over the world dedicated to keeping the Internet secure, stable and interoperable. It promotes competition and develops policy on the Internet’s unique identifiers.” Importantly, ICANN is structured as a California nonprofit public benefit corporation that holds its assets in charitable trust, subject to the regulatory authority of the California AG. The right to approve or reject the sale of the PIR assets and .ORG registry to a prospective buyer is a particularly valuable charitable asset held by ICANN, as I discussed with EFF Senior Staff Attorney Mitch Stoltz, who wrote Preserving ICANN’s Independence Through Bold Action – Not Inaction.
Ethos Capital: Ethos Capital is “a private investment firm that focuses on companies in which technology can be used to automate, optimize and transform traditional business models into faster growing, more efficient organizations.” On November 13, 2019, PIR and ISOC announced that they had reached an agreement with Ethos Capital, pursuant to which Ethos Capital would acquire “PIR and all of its assets” from ISOC.
California Attorney General: The AG “regulates charities and the professional fundraisers who solicit on their behalf. The purpose of this oversight is to protect charitable assets for their intended use and ensure that the charitable donations contributed by Californians are not misapplied and squandered through fraud or other means.” In a letter dated April 15, 2020, the AG stated: “I urge ICANN to reject the transfer of control over the .ORG registry to Ethos Capital. The proposed transfer raises serious concerns that cannot be overlooked.” A key provision also noted: “ISOC and PIR are charitable organizations that are accountable to their community stakeholders and to the public at large. In contrast, a private equity firm is accountable only to its investors.”
This important victory exemplifies the value of nonprofits advocating for their best interests. It makes a difference. Save.Org has been and will continue to be a great initiative protecting the .ORG registry. A joint statement from NTEN and EFF provided:
We want to thank the nearly 900 organizations and the 64,000* individuals from all over the world who joined us in calling for the sale to be stopped. The collective voices made a difference.
This is not the final step needed for protecting the .Org domain. ICANN must now open a public process for bids to find a new home for the .Org domain. ICANN has established processes and criteria that outline how to hold a reassignment process. We look forward to seeing a competitive process and are eager to support the participation in that process by the global nonprofit community.
The .Org domain, the third-largest top-level domain, needs a secure and reliable steward that can prove it has the public and nonprofit sector’s interests at its core.